The Future of Automotive Retailing – Customer Centricity

If you are in the business of automotive retailing for long you have heard the age old complaints about the existing providers of dealer systems, old technology, rigid and in-flexible contracts, high cost, etc. Perhaps you have made those comments and realized that frustration…they are real issues but many times they mask both the real challenges and the real opportunities of what is essentially automotive dealer ERP.

Let’s look at the business and its needs from other perspectives.

Today’s dealer systems must evolve from being a cost center or just a “box” to contain business processes and data to systems that enable the business. They must be capable of creating business opportunities and revenue. They must be flexible so that new business processes can be established…ones that satisfy customers on customer’s terms. They must be “customer centric”. And they must provide the foundation for creating or taking advantage of new business models…models that are driven by concepts such as the connected car or changes in customer attitudes and expectations.

The dealer system of tomorrow will also be endowed with vast amounts of data. Data comes from the manufacturer of the vehicle, from prospects and from customers. Other data will come from the vehicle itself; such as diagnostic data or operational data. Still more will come from other sources such as 3rd party providers of goods and services, from social media and from regulatory or governmental sources. Much of this data is bi-directional. The systems that will power successful dealers and dealer groups will facilitate handling this vast amount of data, seamlessly sharing the data across the value chain and using analytics and predictive algorithms that will provide real time actionable intelligence. Intelligence that allows interaction with customers on their terms and in the business moment!

The customer facing functions will increasingly be driven by mobile devices. Customers of the future want to interact with the dealer staff, not at a service counter or a sales desk, but “at” their vehicle, whether on the service drive or in their driveway, or from the convenience and privacy of their home or office! Mobile customer facing applications will be the price of entry…not an option or enhancement as they are considered and priced today. The dealer system of the future will be powered by mobile applications that can be downloaded, just as we download apps from the app store, and with much lower price and integration points.

The final point I want to comment on is the disappearance of the traditional business silos that exist between the manufacturer or importer and the dealer and between the individual dealer and its dealer group and within the dealer itself. Many times dealers or dealer groups believe they need a new dealer management system just to replace the old one. But the reality is that they need enterprise systems, systems that are able to support not only the operations of one dealer or set of dealers but also the financial operations, human resources, inventory, purchasing and financial reporting compliance of the dealer group, all the while reducing systems cost and the cost of business.

Dealers and groups of the future will also be well served to have data and processes closely connected with the manufacturer or importer. The more the data is similar, the easier it is to reach mutually supporting and profitable decisions in real time.

Throughout the fundamental revolution from cost center to profit center without siloed business processes, there are two very important perspectives…perspectives we must never lose sight of. The first perspective is the customer and their behavior and preferences…without customer centricity our business withers and dies in today’s competitive business environment…

Dealer management systems must be the critical enabler of new busines models, smooth seamless business process that enable a great buying and ownership experience and profitability for the necessary and critical retail automotive dealership for delivering sales and service in the market place.